Michael Kao of Akanthos Capital Management expressed what I view to be a spot-on concern (or irony) in a recent RealVision interview.  

“What I find really ironic about this EV transition is that we may be trading one dependence, formerly of middle east oil, to a new dependence, which is a dependence for rare earths required for batteries in making EVs. And that dependence will be on potentially the Democratic Republic of the Congo and China.”

Clearly, the dependence-transfer argument is legitimate, although we must recognize that our dependence on fossil fuels — given all of their applications, including in the generation of electricity (still better than half of the world’s generation comes from fossil fuels), in the manufacturing of electric vehicles and their batteries, and, not to mention, in the mining of the metals and minerals that go into those batteries  — isn’t going away anytime soon…

As for the growing dependence on rare earths, while the bulk of the supply indeed comes from outside the U.S., there are nevertheless a number of investment opportunities within our borders.

Presently MP Materials (rare earths) and ALB (lithium) — along with broader baskets (ETFs) with exposure to the metals, and their miners, essential to this evolution of energy — are positions within our core portfolio…

All the while we remain bullish — for reasons I’ve outlined herein of late (here and here most recently) — on the traditional energy space as well…